We are going to start working with a broker who will be sending loans to us. I have gone to the HUD website, printed and read the 24CFR Part 3500 on RESPA statement of Policy Regarding Lender Payments to Mortgage Brokers.
The broker will take the application information and complete at least 5 more of the required items.
I understand most of what I read but my concern is that I have or will miss something.
My questions are:
Is this information the complete information that would govern this relationship?
If I need more information (that's crazy - I think I always need more information!)can you direct me to where I should look?
Can we pay them a % of the loan? Such as .50% Or does it need to be a flat fee that does not correlate with the loan amount?
Is this arrangement something that would need a contract with the broker and if so is it something we would need legal counsel for? Or is it just a simple statement they sign stating what they will perform for the fee?

Could someone also tell me what the risks of this arrangement would be?

Broker licenses and contract requirements are usually governed by state law, I would begin there. But as a side note if I was going to deal with a broker then I would want a contract that specifically spelled out their, and our responsibilities in the transaction.

I'm not aware of any thing preventing you from paying a percentage, that is the common practice, as long as the fee paid can me justified. IOWs, and this is my opinion, what did the broker do different on that $500,000 mortgage to get paid $5000 vs the $1000 they got paid on the $100,000 mortgage?

Thank you for your answer. I am also reading previous threads on brokers. I agree with you about the high dollar mortgage. I was thinking about a flat fee but I'm not sure we could settle on one that would reflect all dollar loans and be accepatable to the broker.